CrunchBase is all about companies and information about those companies. You can search for companies, but also look up investors, people, and relevant events. There is a news section with updates on all aspects of popular companies, including which products they are releasing or updating. Like many websites, you’ll need to subscribe to CrunchBase’s pro option in order to take advantage of most of the website’s advanced features. Don’t worry about subscribing if you’re just passing by and want some information on popular companies, but definitely think about it if you are serious about your business and competing with others.
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The ultimate startup buzzword that never seems to die? Growth. Rapid startup growth is responsible for the most profitable unicorns, while poor growth is at the core of many failed startups. It’s easy to see why many early-stage tech companies have started carving a job specifically focused on growth aptly named, a Growth Manager.
Growth Managers are primarily responsible for growing the demand and revenue of the company and are a widely interdisciplinary yet frequently misunderstood role.
Growth Managers live in the middle of product and marketing and are focused on “customer and user acquisition, activation, retention, and upsell” (Harvard Business Review).
We dive into startup growth in this interview with Siftery’s Head of Growth, Gerry Giacoman Colyer. We explore what exactly is a Head of Growth and why it’s such a hot topic for startups. Gerry also shares his work with the LGBTQ and Mexican community.
The Role of a Growth Manager
Tactically, Gerry’s growth team “is in charge of everything that happens up until the point a lead becomes an active user and/or starts paying for one of our offerings.” The growth team’s responsibilities include optimizing and managing a lead’s experience through the entire funnel such as landing pages, sign up flows, as well as content marketing.
“Ultimately startups are about growth. Having a team that is exclusively focusing on trying to unlock growth is of particular importance to startups.”
On a micro level, “startup growth teams involve a mix of disciplines: marketing, sales, and partnerships.”
Gerry’s team encompasses engineers, designers, as well as marketing analysts. His team is a master at celebrating small wins. They’ve even set up “a couple of smart LED lights that flash green whenever a user signs up.”
Gerry says it’s “a great rallying tool,” even if he now swears green flashes follow him around.
When a Company Should Invest in a Growth Manager
While Harvard Business Review goes so far as to argue that “every company needs a growth manager,” Gerry points out the nuances of this statement vary from company to company.
According to Gerry, “There’s no right answer to [when a company should invest in a Growth Manager],” clarifying, “It’s a matter of complementing roles and skill sets in the leadership team.”
The Biggest Mistake that Hinders Startup Growth
“It’s definitely not focusing enough,” Gerry emphasizes that a lack of focus is the death of startup growth.
As a previous co-founder, Garry understands first-hand an entrepreneur’s pitfalls when building their company.
“For an entrepreneur, it’s easier to think about where you want to be 5 years from now. As tempting as that is, trying to do too much or trying to build a solution that’s too broad is unlikely to get the adoption or deep engagement that you need to grow.”
Gerry’s startup was successfully acquired in 2015.
The same applies to successful startup growth hackers as “you’ll find most of the growth comes from one or two drivers at most.” The objective of the growth team is to “identify and maximize the potential of those channels, rather than managing 10 different channels at a time.”
Advice To Entrepreneurs Starting Out
“Make sure you’re [starting a company] for the right reasons. Starting a company should be the end of a long and hard, or at least hard, introspective process.”
The wrong reasons to start a company? For one, doing it solely because you crave independence. Gerry unravels this myth. He explains how “you’re ultimately never truly independent. You’re always responding to someone, whether it be your investors, your co-founders, or your customers.”
Lastly, doing it for the money alone is also just as bad as a reason to start a company. Since, “in many cases, the risk-adjusted rewards aren’t actually as good as they might seem from just paying attention to the successes.”
Managing a Happy Startup Growth Team
When asked, Gerry immediately asserted he “believes strongly in giving ownership.”
“You must define ownership. Ownership must be specific enough for the contributor to know what to focus on, but also broad enough for creativity to flourish.”
To maximize ownership, Gerry breaks up his team based on a metric goal. For example, Gerry divides his growth team by metric goal.
“One team is the discover-growth team. They focus on bigger picture brand awareness. The second team targets sign-ups. Lastly, the third team is the engagement team. Their aim is product engagement and upselling.”
Hiring The Right People for a Growth Role
“In terms of the skills, I look for someone with T-shaped skills.”
Gerry describes how individuals with T-shaped abilities, “have some broad knowledge but are particularly proficient at one or two skills.”
“But on the other hand, I’ve also found receptiveness to feedback incredibly important. No one is perfect, and if we can have that open communication, we will all be better as a team. Openness and the ability to communicate is non-negotiable.”
Top Traits to Look for When Hiring a Growth Manager
“It’s a mix of three things. First, it’s an affinity towards building a product. Secondly, you must be willing to aggressively experiment. Lastly, it’s important to question what’s working and what’s not.”
Gerry agrees that “entrepreneurs or self-starters tend to make good growth managers.”
Gerry advises looking for someone who is “willing to create initiatives and can do so at a high velocity. A great growth manager must also be very analytical and can double down on the resources when it makes sense.”
Giving Back to the Community
As a board member of Stanford Pride as well as the founder of a Mexican LGBT professional network, Gerry is highly driven to give back to the community he once called home.
“I grew up in northern Mexico as LGBT and it was not necessarily the easiest time. It’s important for me to push for recognition for the LGBT community so that more people in our community are empowered to live the best versions of their lives.”
Gerry is motivated to build “bridges between the U.S. and Mexico in particular.”
“Companies in the U.S. have a great need for engineering talent. It’s underappreciated how much talent is just south of the border. Mexico is producing more engineers per capita than the U.S., and there’s a lot of cultural proximity.”
Both countries sit close to his heart. For Gerry, “helping make connections between the U.S. and Mexico is a passion project for sure.”
The Best Professional Advice: Take Notes
“Always take notes, it forces you to actually listen and talk less. I always appreciate that whoever I’m talking to has something interesting to say or an interesting perspective.”
Also, he notes, “There’s the added benefit that it conveys respect to your listener. You want to develop that kind of rapport.”
Gerry’s Original Startup Joke
“Why couldn’t the wasp sign up for the new app?
Because it was strictly B2Bee. ”
Want to tell us your startup story? DM us at @crunchbase.
The post Growth Manager 101: Interview on Building Startup Growth with Siftery’s Gerry Giacoman Colyer appeared first on Crunchbase Marketing.
The stars were aligned for GetApp. Gartner was in, and after years of sleepless nights, the highs and lows, the ups and downs–it was all coming together. A new journey was about to start.
Thinking through an exit strategy
When Manu & Christophe founded the company, first and foremost they agreed on one thing, being laser-focused on making GetApp profitable. They were both in an unknown territory. So instead of having a set exit strategy, they decided to use a level-headed approach.
They both were in their 40s. They understood that they wouldn’t have many more opportunities to get this right. “Failure was not an option for us. We figured if we build a good company, and the rest will happen organically. Knowing who would acquire you in 8-10 years from now seemed impossible at the time.”
They decided against building GetApp’s business around an exit strategy. Banking on an acquisition seemed too risky, even though “some people are really good at it,” Manu clarified.
Manu explained how some companies will “identify what’s missing in someone’s portfolio and they build a company around it. Many startups build their companies around an exit strategy. Companies like Salesforce, Facebook, and Twitter will eventually acquire the lucky ones.”
However, GetApp’s founders found this business model too aggressive and risky. The knowledge of their geo-specificity had a lot to do with their decision, too. “In Europe, we’re slightly more conservative. We don’t consider a failure on a resume as a good thing,” said Manu, laughing, “it’s very different from the U.S.”
Considering an acquisition offer
Both Manu and Christophe looked closely at company fit when they analyzed acquirers. “We were conscious that not only our product was getting acquired, but so were our people,” Manu reflected.
Manu witnessed first hand how ugly startup acquisitions can get when working at Sun Microsystems. “Startup acquisitions can quickly become huge failures if there is a lack of product alignment or a culture shock. Our people helped us get to this point and we really wanted them to also reap the benefit of their hard work.”
“Surely, one part of the exit process will always be selfish. An acquisition is a game-changer for you, your family, and your career. However, the acquisition is also a game-changer for our team.”
With a lot of pride, Manu went on to explain how “an extremely satisfying part startup acquisitions is knowing that the company we built is still rapidly growing,”
So when is the right time to plan an acquisition?
“As long as you’re growing and profitable you’re in control of your destiny. That’s why the main KPI in a B2B startup should be revenue. If you are profitable, you don’t need to raise money or get acquired. Not only can you pay yourself and your team, but you can also make business decisions without an additional pressure.”
Following their initial strategy, Manu and Christophe growth-hacked their way to profitability through SEO & SEM. Their company’s profitability made them a favorable startup acquisition. They were not in a huge rush, but they didn’t want to miss their window either.
Manu and Christophe still wanted to make sure they understood their market and monitored market trends constantly. As a result, They set up Google Alerts, monitored TechCrunch, and even built their own mini-integration to Crunchbase to monitor funding announcements.
“We wanted to understand who is getting funding, who’s buying whom and why” — Manu explained. “When you see that startup acquisitions are happening in your market, you need to ask yourself if that’s a threat or an opportunity for you. Will that make your competitors stronger? And don’t be shy about reaching out to a company who’s acquiring in your space to understand the rationale!”
And this approach paid off. The rest was history.
6 tips for startup acquisitions
Here are some tips for entrepreneurs looking to build out their exit strategy:
- Make sure you have a “clean house” from day one. Accounting, legal, IP, HR — have all your ducks in a row. Everything is scrutinized during due diligence. A small inconsistency can kill the deal or shave some serious dollar signs off your valuation. Don’t be cheap when paying for financial and legal services – or you may regret it.
- Don’t get lost in translation. Hire a local advisor if your buyer speaks a different language, or is from a different culture.
- Be in touch with M&A managers at companies acquiring in your space to build your exit strategy.
- Resist the sirens of intermediaries that will attempt to solicit you earlier, but don’t miss your last window of opportunity either. It’s a fine balancing act.
- Make sure you have a Plan B if Plan Acquisition does not pan out. The best way to plan for your exit strategy is to keep growing your business.
- Never have a bad relationship with your competitors. You never know how life will turn out. Your competitor could be your acquirer. It’s a small world.
The post Startup Acquisitions: What’s Grace Got To Do With It? appeared first on Crunchbase Marketing.
As a woman of color in tech sales, I have countless stories of harassment, both from co-workers and prospects alike. But I’ve never risen to a high enough position where I felt empowered to speak up.
Which is why when former coworkers asked me things like…
“Do you think your boobs are big? Do you like them?”
“Do you listen to music while you have sex? What type of music do you think is best?”
“Would you swipe right on me? Can you help me with my Tinder profile? Just pick what you’d like!”
“You’d be such a cheap date. Where were you when I was dating?”
“I just thought you were another hot Asian girl.”
“Filipinas are so crazy, right?”
“So do you like girls now because you had a bad experience with a boy? When did that happen? Would you ever date a guy again? When did you first date a girl? What is it like to kiss a girl?”
…I said just enough to play along. To get the attention off of me and to get them to stop talking.
I didn’t feel important enough to get a microphone, and if I told someone about this, my words wouldn’t even reach their ears. I wasn’t an engineer who could make or break a product. I wasn’t a CEO. I wasn’t a senior-level-anything. I was an SDR. Who was going to care what I had to say? Who would believe me over someone who had seniority? Who was funny, older, and well-liked?
In fact, the one time I tried (read: was told) to do something about it only made everything worse. A coworker, who had hit on my girlfriend after hitting on me for an uncomfortably long time at our holiday party, was making jokes in front of our team about this incident. The hairs on the back of my neck stood up, and after what felt like hours of squirming in my seat, I asked to speak with him privately, hoping things could be squared away.
But when I told him how it made us feel, how some of his comments were not only inappropriate and creepy but also racist—he got defensive. After hours of back and forth, I knew he didn’t, and wouldn’t, get it.
Everything eventually ended with a report to my manager, who then told me to report this person to HR. I don’t know what happened after I talked to HR, but I did decide to tell my manager that I didn’t feel comfortable being around this coworker moving forward. I didn’t want to work with him, attend any happy hours, or even hang out with the team after work.
The unexpected problem, however, was that when you isolate yourself from a group, you seem like the odd one out. My desperation to be included, to be considered a friend, a cool girl—increased tenfold. I didn’t want to be in self-imposed exile, I didn’t want any of this. Now I was the outcast who wished I could take it all back.
So what do you do if you find yourself in a similar position?
I don’t know, but I’ve dug around the interwebs to see if anyone has an answer to this question.
The Muse recently detailed a few steps you can take when dealing with harassment from a client. Keeping records of emails, chat histories, etc., stuck out most to me because it’s something I wish I did.
This raises the question of how to keep records when the harassment is verbal. You can’t walk around recording everything all the time, can you?
Not entirely, but a tip taken from the FBI serves as a solution I wish I had known about sooner: write down everything. Just like a lawyer, the more diligent and careful you are in writing down everything that’s said, the more proof you will have. It’s an easy fix that might feel tedious, but will ultimately help your case if you are faced with a scenario where you need some sort of documentation to support your claims.
All in all, the steps The Muse mentions are actionable and help prepare you for what hopefully won’t come.
What does this all mean for me? For us?
Being a woman of color in tech sales is challenging both mentally and physically. There were too many mornings where I struggled to fight off depression, and too many nights where anxiety kept my eyelids glued open. The emotions were enough to convince me I couldn’t do this and push me off of the sales track for almost a year.
But now that I’m back, I’m not willing to sit here and take their punches anymore.
There are too many people like me who need the bro culture to change, who need to dismantle the boys’ club so as to make room for everyone.
Who need to know what to do when they find themselves in similar or worse situations.
Who need to know they’re not alone in this, that their voices will be heard.
Who need to know that there are men out there fighting for us and alongside us.
Who need to know that they don’t have to give up on their dream or their career because of this.
And that’s exactly what I plan on doing here.
Disclaimer 1: I realize that I have an immense amount of privilege working in tech in the first place, and that there are many, many people in positions much worse than I. But whenever I’ve gone through something like this, I’ve always wanted to feel less alone, to feel like there are steps I can take to make my situation better since no one was going to do that for me. So I hope that this, and the ensuing articles, are able to do that for someone else out there in a similar position.
Disclaimer 2: This piece is unrelated to my time at Crunchbase. These are scenarios and situations I’ve encountered at other places I’ve worked. And going along that point, this isn’t about the companies themselves. A company can come from the best place, do everything right, and still have stuff like this happen because we are dealing with a systemic cultural problem that pervades teams across almost all industries.
Filtering through thousands of companies, investors, and people can be intimidating at best. When you aren’t quite sure who or what organization you’re looking for, staring at a blank search box can feel daunting. Where do you start to find qualified leads? What should you search to benchmark your business metrics? Let’s walk you through how to search Crunchbase, and show you some popular searches help you to find new customers, investors, and more.
Registered users can add up to two filters when they search Crunchbase (Crunchbase Pro users, you’re looking at over 25 search filters).
3 Easy Steps to Sift through Crunchbase
First of all, let’s get the technicalities out of the way. So how do you search Crunchbase?
1. Select what you would like to search Crunchbase for by choosing between companies, people, investors, funding rounds, acquisitions, schools, and events. Psst, it’s on the left-hand side.
For this example, we’ll click Companies to start our Crunchbase search.
2. Click + Add Companies filter to narrow down all the companies in Crunchbase based on anything from location, to an investor, to a number of employees. Then add the second filter by clicking the plus sign again.
3. Click the green Search button when you’re finished to filter through all the companies.
As a result, you should now have a more targeted list of companies based on a few filters. Feel free to switch up these filters at any time to see what else you can find.
Our Most Popular Crunchbase Searches
Here are the three most common uses we see people search Crunchbase for, as well as some great searches that we’ve found to be insightful.
Feel free to click on the below searches and customize the filters to your liking.
Sales | Search Crunchbase for New Customers
In order to build your pipeline and find qualified leads by searching for companies that have recently increased budgets. For this reason, companies that have recently raised funding or have been acquired typically have more cash to burn.
Entrepreneurs | Search Crunchbase to Find Investors
Find angel investors, accelerators, and partners at venture capital firms with a quick Crunchbase search and narrow down investors based on your stage, sector, and location.
Quick tip: Click the magnifying glass next to any investor to find the investor’s portfolio companies.
Market Research | Search Crunchbase to Benchmark Business Metrics
Not sure how much to ask for your Series A, or want to see what competitors in your sector are doing? Then search Crunchbase to identify startup trends, while making sure you’re keeping up with the competition.
Make a Crunchbase Search Personal
Most notably, use Crunchbase’s free search tool to discover the right company or investor for you. Want to build more complex searches with search filters like web traffic growth or buy signals? Then check out Crunchbase Pro.
Email us with any questions at firstname.lastname@example.org.
The post How to Search for Investors, Customers, and Benchmarks on Crunchbase [for Free!] appeared first on Crunchbase Marketing.
Ever browse Crunchbase and come across an interesting startup or potential investor? Keep track of them by adding an organization to your My Follows list.
It’s a quick and easy way to group together companies of interest. These could be potential leads, investors, or your closest competitors. Most noteworthy, in a rapidly-changing world, it’s vital to keep a pulse on other companies in your sector, and your free My Follows list is the first step to staying up-to-date.
How to add a company to your My Follows list
First of all, to add a company to your My Follows list, just click + Follow on the upper right-hand corner of any Crunchbase profile.
You’ll find My Follows under the My Lists page on the left-hand side.
Receive live notifications from My Follows
Want to know when these companies raise funds, make headlines, or get acquired? Receive email notifications when these companies have updates by clicking the gear icon in the upper right-hand corner.
Furthermore, choose what kind of updates you wish to receive, and how often you’d like to receive them. So think of notifications as your personal private eye, keeping tabs on who could make or break your professional success.
Reasons to use a My Follows list
Now that we’ve dove into how to build out your My Follows list, it seems especially relevant to jump into some of the most common use cases we see surrounding My Follows.
Sales | Track Prospects
We see many salespeople use the My Follows feature to track their prospects. Salespeople will set notifications around key buy signals such as raising funds, acquisitions, and news mentions to keep up to date with their leads.
Entrepreneurs | Market Research
Entrepreneurs most frequently use the My Follows list to keep track of hot competitors, interesting startups, and potential investors.
The post My Follows List: Keep a Close Eye on Your Favorite Startups appeared first on Crunchbase Marketing.
The 48-hour sailing trip from Barcelona to Ibiza was a spontaneous idea. It wasn’t a leisure trip or a means of getting to an infamous party island, but a tool to see if Manuel Jaffrin and Christophe Primault could work together as startup co-founders.
Manu and Christophe had only known each other three months prior to co-founding GetApp. “We knew that we had complimentary backgrounds. I’m a computer engineer that moved into sales — I understand technology. Christophe’s background was in marketing, and he was a startup CEO at one point. He had the knowledge of running a company, which I didn’t have,” shared Manu.
On their sailing trip, they made a point discussing a variety of essential topics, like their business ideas as well as their personal lives. Both in their 40s and with families, Manu and Christophe not only set and aligned on expectations around their new business but also on their ideal work/life balance. Importantly, they also aligned with what they would do if the company became successful.
Early on, they made a lot of right decisions. The relationship between co-founders is often compared to a marriage, and for good reason. Both Manu and Christophe understood what was at stake–they were picking a person who could help them execute on their dreams. The person who will be there, for better or worse for years to come. The person to whom they could call in the middle of the night and sanity-check that everything was going to be okay.
Picking the wrong co-founder is one of the most common reasons why startups fail.
According to Inc., “Startups don’t fail because they’re startups. They fail because of the founders.” FastCompany mentions that 75% of VC-backed startups fail, as startup co-founders’ pride can lead to an unwillingness to listen to valuable advice.
Since finding a co-founder can make a difference between a wantrepreneur and a true entrepreneur, it’s not surprising that there are a lot of co-founder matchmaking services. Sites like FounderDating.com and TechCofounder.com. Founder2be.com offer you an ability create a profile, as you would on an online dating site, to help with finding a co-founder.
There’s HiddenFounders.com with a tagline of “CTO as a Service.” There are Craigslist “co-founder needed” ads and a Reddit Co-founder community. Services like StartupWeek offer networking workshops for aspiring entrepreneurs. Their events attract an equal amount of technology-savvy and business-savvy participants who are chasing the same dream of building a successful startup.
But Manu got very lucky. He didn’t need to use any of these services. He met Christophe just six months prior to launching GetApp, when he worked for Sun Microsystems in sales.
They met again later. “By then, I had left Sun and wanted to entertain some business ideas. Very quickly we decided that we should build a company together: Christophe had the vision and I felt I could make it happen,” Manu reflected.
What other advice would Manu offer to the aspiring startup co-founders?
“More often than not, people look to their friends and family when searching for a co-founder. I know many stories when people have lost both their business and their friendship. It can work, but it’s a risk that you need to be aware of and be willing to take. Instead, you should look for someone with complementary skills. Remember, the stakes are sky-high!”
The post Finding a Startup Co-founder: The Luck and Science appeared first on Crunchbase Marketing.
Did you know registered users now have access to our premium data partners? We’ve added new data fields and users can now see website traffic information and mobile app analytics directly in Crunchbase profiles and Crunchbase search.
We’ve teamed up with our friends at SimilarWeb and Apptopia to provide our users even more value on Crunchbase profiles. We’ll walk through the new information fields now in Crunchbase and some great use cases.
Website Traffic Analytics: SimilarWeb
SimilarWeb provides 15 new data fields in Crunchbase and adds in-depth website traffic and engagement information such as traffic, month-over-month growth, global rankings, page views per visit, and more.
Use website traffic data to analyze a competitor’s digital strategy or benchmark against companies similar to yours.
SaaS Companies with 100K to 500K Monthly Site Visits
Find fast growing prospects with new budgets.
Companies with High Website Growth Rate and who have Recently Secured Funding
Mobile App Analytics: Apptopia Lite
Apptopia Lite provides 9 new data fields in Crunchbase and adds limited mobile app intelligence of iOS and Android application usage and revenue data. Get access to accurate and transparent information on macro app trends and micro-app details.
Find highly qualified leads from companies with fast-growing apps.
Health Care Companies with Rapidly Growing Monthly Active Users
Invest in companies with the highest monthly app growth rate in specific industries and regions.
Midwestern Companies with Quickly Growing Total App Revenue Generated
Where To Find New Data
Drill down on rapidly growing companies and Narrow down your search to find potential prospects, portfolio companies, or partners. Free users can add up to two filters, while Crunchbase Pro subscribers can add up to 15 filters.
Free users can add up to two filters, while Crunchbase Pro subscribers can add up to 15 filters.
Add more Marketplace partners by browsing our catalog.
Questions? Reach out to email@example.com.
A story of two entrepreneurs who were killing it with SEO. Then, when organic Google love stopped rolling in, they took action.
“Hope is not a strategy!” — said Manuel Jaffrin. Manuel (Manu) was referring to GetApp’s organic traffic. The traffic that fueled GetApp’s rapid growth at one moment, had plateaued the next. Despite all his SEO efforts, Manu needed a new plan and fast.
Jaffrin had decided early on with his business partner Christophe Primault to bootstrap GetApp. That meant no budget for experiments. SEO was a very cost-effective acquisition channel, and it drove most of the revenue until it stopped.
But let’s jump back eight years. The idea of GetApp was born when Manuel worked for Sun Microsystems. Selling infrastructure to startups was a comfortable job. It was a job that Manu did for thirteen years. He was good at selling. But things were about to change.
As the SaaS revolution unfolded in the first decade of the millennium, Manu saw where modern software was heading. Underscoring that belief was a significant shift in the mentality of his prospects. “I realized that the companies were no longer interested in Sun’s products. They were SaaS startups that wanted access to Sun’s clients. They needed to go to market. They were looking for a place to get clients.”
The only platforms available at the time were Salesforce AppExchange, VMware Virtual Appliance Marketplace, and Intuit Add-Ons. All three were proprietary ecosystems. Together with Christophe, Manu saw an opportunity of creating a more flexible, non-platform-specific independent marketplace. They both had an in-depth knowledge of B2B space, and they were both great at selling.
They launched GetApp in January 2010. It became a comprehensive database of business applications. Companies were using it to compare SaaS enterprise solutions. Developers & entrepreneurs were using it as a much-needed affordable lead gen channel.
“In the tech world – timing is everything,” Manu noted. And GetApp’s timing couldn’t be better.
They got their first client a few short weeks after going live. Then the business started to snowball — sign-ups, powered by their SEO strategy started to roll in. Companies flocked to GetApp because the heavy lifting was done for them. Manu knew that they were on to something real.
Manu and Christophe had mastered the art of SEO. They hired a few writers. User-generated software reviews kept rolling in. Their organic traffic was growing at a lively pace. “As long as we had traffic — we’d have no problem scaling the business.”
“We were limited by the amount of traffic we could get, not by the amount of money our clients were willing to spend.”
But then it happened. The organic traffic stopped growing. No matter what Manu and Christophe tried, after four months they needed a new plan.
Around that same time, Manu got introduced to a ‘genius.’ This Berkeley mathematician/statistician was not a marketing expert, but he was a Google AdWords ace. The mathematician looked at GetApp’s account and requested full management access. He then asked for a minimum of $100K/month in media spend. Manu was game — the company had enough money due to its experiment with SEO.
And the bet paid off. In a matter of a few months, GetApp was propelled into a whole new league. By the end of six months, their traffic troubles were over. In fact, it grew 10X. Yes, AdWords could be a pricey channel, especially for startups — but for GetApp, the economics were there.
Their ability to pivot fast, allowed GetApp to keep on growing exponentially. This success led them to be acquired by Gartner.
“When you’re a startup, you control very few things. You control your product, and you control your team. That’s it. You don’t control your clients, you don’t control your competitors, you don’t control your market. If you don’t control your source of acquisition — it’s scary. That’s why I became a big fan of Google AdWords.” — Manu smiled.
“When you start to ‘crack the code’ on getting the right traffic at the right cost and nail your messaging — it’s insane. It allows you to forecast more accurately. With SEO it was never the case — it was more like hope. And hope is not a strategy.”
Manu’s favorite CEO joke is by Ben Horowitz:
“As a startup CEO I slept like a baby. I woke up every 2 hours and cried.”
Be on the lookout for Parts II and III of our interview with Manuel Jaffrin!
In 1996 a founder of a small startup visited 20 different investors. He raised $50,000 for less than 1% in equity. One of those investors was where his own parents, who put their life savings in the company. Those investment checks today?
Worth $3.5 billion. The founder? Jeff Bezos of Amazon.
Today, investors and entrepreneurs alike are chasing the Amazon dream. They are working hard and smart with the hopes of making it big by placing their strategic bets on the potential next unicorn.
Amazon.com in 1997
Securing funding from a venture investor is one of the trickiest tasks an entrepreneur can tackle. More than just a “gut feeling,” there are specific questions – investors ask themselves before they decide if this is a good company to fund.
The best way to raise the money you want? Get inside your investor’s head. Here are the questions you want to ask yourself to be considered a good company to fund.
Can this team lead the company to an exit?
Most investors will tell you the key to finding companies to invest in is assessing the team. The most important element is to look at the people, particularly for seed and early-stage investments, as Om Malik, Partner at True Ventures and founder of Gigaom states.
“Seed investors who are in for the long haul need to love the entrepreneur enough to have a fair and honest and constant communication while building the company.”
In addition to good chemistry between the investor and entrepreneur, investors look for solid management teams with experience and a variety of skill sets and disciplines. They want to see complementary and a diverse skill set as part of the company’s DNA when deciding if a company is a worthy investment.
Do I believe in the founder’s ability to succeed?
Investors need to see that a founder has skin in the game, whether that means going full time or at least having invested their own money into their venture. Here’s where “passion” really plays into an entrepreneur’s pitch and story.
Investors look for founders with a strong professional or highly personal understanding of the pain point they are trying to solve. Successful companies are founded by “people with deep domain and functional expertise who are well suited to build a particular solution…[or] by people who very personally understand the pain point they’re solving,” according to Lauren Kolodny, principal at Aspect Ventures.
Entrepreneurs need to be living and breathing their company for success to happen.
Becca Clason / sheletsherhairdown.com
Is this a great product?
Taking a step back and objectively looking at your company is crucial to ensuring you have a great product with a competitive edge.
“One of the saddest things I have heard from an enterprise tech company selling some new SaaS platform that is supposed to “revolutionize” their industry is: ‘we help our customers increase revenue by 10%!’”
Your product must solve a major problem or pain point in a big way, which means providing your end customers with a lot more value than just being 10% better.
Do I feel comfortable investing in this industry?
Venture capitalists typically want to invest in a sector they know and understand – not only for their own understanding but because it is incredibly profitable for investors. Additionally, industry knowledge helps investors better parse out which companies are ordinary and which are truly remarkable.
The Kauffman Report, the largest research report on angel investing, found that “Investment multiples were twice as high when angels invested in industries they were familiar with.” An investor’s background will determine if a company is a valuable investment, not only for the VC but also the entrepreneur.
What does growth look like for this startup?
Great companies to invest in share both an extensive understanding of the market, but also strong metrics, specifically: annual recurring revenue (ARR), monthly recurring revenue (MRR), and total addressable market (TAM).
A good way to make certain a company is generating a steady stream of ARR is by ensuring the product has both a large and continuous demand in a big market.
Another classic example of a great investment opportunity is the lowly razor blade. In 1989, Berkshire Hathaway bought $600 million of preferred stock in Gillette. In 2005, the razor manufacturer was purchased by Procter & Gamble for $57 billion, valuing the stake at $4 billion. Not bad at all.
For monthly recurring revenue, it is helpful to look at subscription revenue, a model most SaaS companies have adopted. Showing a consistent form of revenue at a high MRR rate is a great way to show a steady earnings predictability. Depending on the baseline, 20-50% month over month growth is a good rate according to Aileen Lee of Cowboy Ventures, also taking into consideration churn, retention, and referral.
Lastly, the total addressable market (TAM) needs to be large enough. For venture investors, a sign of a worthy company is having a market that can generate $1 billion or more in revenue according to Philip Nadel, of Forefront Venture Partners. The TAM needs to be big enough to make an “upside revenue meaningful to an acquirer.”
Ultimately, the bigger the market the greater likelihood of making a sale, and the more quickly the business can grow.
The Amazon Effect
True grit and passion are contagious and can lead to real returns as seen at Amazon. There is no single formula to build a successful company but looking for what investors consider good companies to invest in can help inform how you tell your story and pitch your idea when raising funding.
Any other advice you’d like to share with entrepreneurs raising money? Let us know by tweeting at us @crunchbase.
The post Chemistry Is (Almost) Everything: How Investors Decide Which Companies To Fund appeared first on Crunchbase Marketing.
If you don’t want to fundraise, don’t become a CEO.
Fundraising is a CEO’s most important and time-consuming job. Delivering a compelling and organic pitch needs not only practice but finesse. We understand that pitching can place entrepreneurs in a vulnerable position, after all, what is more personal than your passion?
We break down the basics based on the pro’s advice. Here’s a rundown on how to find, cultivate, and build the most important partnerships in your business:
1. Relationship building is crucial – start early
If you’re looking to build a company with venture funding, you will be a fundraiser for at least the next five years of your life. Networking and a lot of relationship building really matters when you’re trying to make your next raise.
A natural introvert? A great way to keep investors engaged is to add them to a newsletter of quarterly updates. Even if you don’t receive a note back, chances are the investor will read your update. Shooting over a thoughtful and quick news mention or a cool new feature release is an excellent way to remind investors you exist.
It’s crucial to keep relationships going, even when you aren’t looking to raise money quite yet, or are too nascent for the investor’s target stage.
2. The venture community is small, don’t burn bridges
This one is pretty self-explanatory. The venture community is shockingly small. Any burned bridges may eventually come back to bite you, particularly when you are looking to raise funds. Our best advice? Don’t burn bridges – you never know when a past relationship will come back to haunt you.
3. Build passion into your pitch, every day
The hardest job you will have as a CEO is keeping the passion alive, and as hard as it may be, it is your responsibility to bring that passion everytime you pitch. This is more than just for investor meetings, but for when you pitch candidates and employees.
Passion keeps engagement and retention high and keeps employees from checking out. Similarly, investors want to know building your company is your passion, and exactly what you want to do for the rest of your life.
4. Follow up three times
Absolutely follow up three times with an investor. No, you will not be scaring them away. Now, don’t do it over a two-day span, but over a two to three week period. Follow up quickly and consistently.
With fundraising as your highest priority, ensure you have a couple of partners to help you manage the communication. Fundraising is a big and vital project and should be treated as such. Enlist your EA or COO to help send out collateral. 15% of your dedicated partner’s time spent managing how many times you’ve followed up, who has your deck, and the like.
5. Pre-qualify your investor
Pitching to investors shouldn’t feel like a monologue of 20 facts listed by order of importance. Be sure to make pitching a dialogue, which entails prequalifying an investor.
“It’s shocking how few people ask what is my investment criteria.”
– Courtney Broadus, Spider Capital Partners, Broadway Angels
Prequalify investors to maximize everyone’s time.
Quickly establish the investor’s investment criteria. Before going into your full pitch, find out if an investor can provide the minimum capital you’re looking for and if they invest in your sector.
6. Don’t run your business like fundraising is the main objective
While your main goal as CEO is to fundraise, you need to be careful not to run your business as such. That means not telling your employees that you need this particular story to be told when raising a Series A or B. No employee wants be working at a company with that’s always running to raise the next round.
7. Focus, focus, focus
The most important thing as a CEO is to have focus and to ensure no one lets you deviate from that focus. Hone in on focus from everything from product roadmap to metrics. Every part of your organization should be aligned with your end story and goal.
In that vein, a big red flag for investors is a lack of focus. You must be able to speak intelligently about your mission and goals. Focus on which metrics you measure, and having a complete understanding of the market and its nuances.
8. Build your story
Run your business like your story is your main objective. Crunchbase CEO, Jager McConnell explains how right after he raises a round of funding, he will draft a pitch deck for the next round. Referring back to the pitch deck is a great way to see when you are gravitating away from your story, and to ensure you are always revising and adjusting your story accordingly.
9. Selling metrics vs selling a big vision
Your goal when pitching is not to have people join your religion, but to convince them that your business is one worth investing in, and will make your investors money.
Depending on your business and the stage of your business you may need to decide whether it’s better to pitch the hype or your strong metrics. Strong metrics that are eating the competition mean that you may not need to sell the dream because real metrics say the business is working.
However, putting yourself against competition can be tricky, particularly if they are large companies. Investors will be disengaged if you pose yourself as a scrappy team of 5 or 6 taking on a company of 300.
10. Practice from your pitches
Identify your top 10 to 20 investors who invest in companies like you, are top tier or are competitors of competitor investors. Then put this list aside.
Practice your pitch with “junk investors,” and wait until your pitch feels organic. Junk investors aren’t necessarily bad investors, but they are the investors you’re okay not getting your pitch perfect with or not winning. Strategically select when and who to talk to, because you won’t get a second chance to pitch right.
This article is based on the talk from the muru-D accelerator panel:
- Courtney Broadus: Spider Capital Partners, Broadway Angels
- Jager McConnell: CEO of Crunchbase
- Mick Liubinskas: Co-founder of muru-D accelerator
- Hugh Geiger: Alumni / Startup Mentor, TechStars
Did we miss any tips? Tweet us your thoughts @crunchbase.